Kudos to JenSense not only for breaking the story but for understanding the signficance:

In terms of dominating the online advertising market, AdSense rich media could seal the deal to make AdSense the force to be reckoned with, by not only dominating the online text ad and graphical banner-style advertising, but in the entire online advertising market. Definitely a story to watch.

Do Google not get it? The reason we liked Google Adwords in the first place is because they were text. Let me spell it out Larry and Sergey, they were not annoying. Now they are going to throw the most annoying and intrusive forms of online media into the mix. Including the evil evil evil intersitials. You know the ones, the ad that stops you getting to the content you wanted and forces you to wait for a full page ad to load so you can click it off and get to the page you expected to see in the first place. Nice.

Advertising agencies will absolutely love this, I know I used to work for one. They will love it not because these ads work but because they can charge higher production fees for planning, building and deploying them. So they will be a success in terms of ad budget, just not in any way that matters (ie. customer opinion and ROI).

To be fair, Chris Garrett has several valid points — many people find many types of rich media ads annoying, and that ad agencies will love this for the higher feeds. But I disagree on whether Google “gets it” and whether these ads “work.”

Remember pop-up ads, the scourge of the Web before blocking software was built into everything? These ads were so obnoxiously popular for one reason — they worked.

Of course they also annoyed the hell out of everyone, so they weren’t a great choice for blue-chip brands with BIG ad budgets. Nor are the most annoying forms of rich media necessarily a great choice for companies with a lot of brand equity. Anyone who thinks that text ads should be the only way for Mercedes, Prada, Coke, Intel, and Apple to contextually deliver their highly visual brand messages online, I would respectfully submit, doesn’t “get it” either.

Google is clearly bent on controlling all ad delivery online — and in every medium, for that matter. As JenSense points out:

And if AdSense did offer rich media to all publishers, they could easily add a new clause that would mean companies such as Fastclick and PointRoll would suddenly be competitive ads and not be permitted on the same pages as AdSense. Many AdSense publishers implement rich media ads to compliment AdSense, and as non-contextual, most of these ad products are well within the AdSense terms. But if AdSense decided to not permit rich media ads on pages also running AdSense or AdSense rich media style ads, this could mean that many publishers would drop competitor’s ads and just show AdSense… as well as those advertisers flocking to AdWords to get their rich media creatives showing through the AdSense program.

There are many Old Media websites making a fair amount of money off of rich media. What will happen if the BIG advertisers with their BIG ad budgets and expensive rich media ads decide that Google’s contextual efficiency makes more sense than the traditional approach to media planning, which involves a lot of media agency labor hours and a lot of human instinct, guesswork, and “art”?

Old Media and Madison Avenue just felt the earth move, and the cracks in the pavement just got bigger.